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Howe Corporation is trying to improve its inventory control system and has installed an on-line computer at its retail stores. Howe anticipates sales of 126,000 units per year, an ordering cost of $4 per order, and carrying costs of $1.008 per unit.
1. What is the economic ordering quantity?
2. How many orders will be placed during the year?
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Madera Produces Inc. considers a $75,000 piece of equipment that will reduce pretax operating costs by $18,000 per year over the 6-year period. There will be an increase in net working capital by $5,000. This equipment falls into the MACRS 5-year cla..
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